ISEG sees economy grow between 9.6% and 10% in first quarter – Conjuntura

ISEG sees economy grow between 9.6% and 10% in first quarter – Conjuntura

ISEG estimates that gross domestic product grew between 9.6% and 10%, year-on-year, in the first quarter of this year, due to private consumption and overseas tourist demand, but it mainly reflects the primary impact, it said Friday.

According to a summary of the situation in April, known on Friday, ISEG economists explained that similar forecasts are “very supported by a significant fundamental effect.” Already in the chain, the estimated first-quarter GDP growth is between 0.5% and 0.9%.

“In terms of spending, this growth was based, above all, on the annual growth of domestic demand, especially private consumption (namely for services, with limited supply a year ago),” the note said. Regarding net external demand, it is estimated that the contribution to GDP growth has been positive.

“In terms of production, growth in services has been the main support for global growth, construction activity has also accelerated, but industrial production will decline symmetrically, for various reasons ranging from scarcity of supply of components and materials to climatic conditions of electrical production,” he explains.

However, the ISEG economic analysis group warns that if the impact of the war in Ukraine and economic sanctions “may be zero or nearly zero in the first quarter, from now on it should be felt”.

Despite the uncertainty, he considers it “almost certain” that lower potential growth for the Portuguese economy will occur in the second quarter and second half of the year.

In this way, ISEG lowers the forecast for economic growth this year to a range of 4.2% to 5%, compared to 4.8% and 5.8% previously, although it expects GDP for 2022 to exceed the 2019 level.